South Korea’s memory chip giants launch “large buybacks”! Kospi index surges 6%, global bond market storm pauses, gold edges down

The U.S. Treasury Department has announced a significant expansion of its long-term U.S. Treasury bond repurchase program, interrupting the recent global bond sell-off and boosting Asian stock and bond markets across the board, while the U.S. dollar stabilized after hitting a three-month low.

On Thursday, the U.S. 30-year Treasury yield fell by 1 basis point to 5.18%, extending Wednesday’s 9 basis point drop; the benchmark 10-year yield also edged down around 1 basis point to 4.63% after a 6 basis point drop in the previous session. Bloomberg’s index tracking U.S. Treasuries with maturities of 20 years and above rose by 1.7% on Wednesday, marking the largest single-day increase since February 2025. This boosted bond prices in Japan, Australia, and New Zealand synchronously.

SK hynix and Samsung Electronics have announced massive shareholder return programs, totaling as much as 140 trillion Korean won, directly igniting a rally in the Korean stock market. The MSCI Asia Pacific equity index rose 1.6%, ending two consecutive days of decline. The Korean Composite Stock Price Index (Kospi) led the Asia-Pacific markets, rising 5.5% to 5.9%; SK hynix surged 12% following its share buyback plan, while Samsung Electronics climbed 8.5%. The Nikkei 225 Index closed up 1.4% at 66,216.79 points, and Korea’s Seoul Composite Index closed up 5.9% at 6,852.58 points.

Jack McIntyre, portfolio manager at Brandywine Global Investment Management, stated: "This administration needs a victory, and perhaps it is trying to engineer one by artificially suppressing long-term Treasury yields. The pessimism in global long-duration markets is unlike anything I have seen in a long time—they have to do something."

• The Euro Stoxx 50 opened flat, Germany’s DAX fell 0.3%, the UK FTSE 100 rose 0.1%, and France’s CAC 40 rose 0.1%.
• The Nikkei 225 Index closed up 1.4% at 66,216.79 points, and Korea’s Seoul Composite Index closed up 5.9% at 6,852.58 points.
• The U.S. 30-year Treasury yield fell by 1 basis point to 5.18%, extending Wednesday’s 9 basis point drop; the benchmark 10-year yield also edged down around 1 basis point to 4.63%.
• Japan’s 10-year yield dropped by 6 basis points to 2.835%.
• The U.S. Dollar Index edged up 0.1% during Asian trading after falling 0.8% the previous day to its lowest since May.
• The euro rose 0.1% against the dollar to 1.1687, the highest since May 14.
• Brent crude rose 0.4% to around $92 per barrel.
• Gold fell 0.8% to about $4,480 per ounce.
• Bitcoin climbed above $69,300.

The U.S. Treasury Department has announced that it will at least double the scale of its long-term treasury repurchase program. This move aims to suppress long-term treasury yields, which have recently surged to multi-decade highs.

Earlier this week, long-term U.S. Treasury yields rose sharply. The 30-year yield reached its highest level since 2007; last week’s 10-year bond auction cleared at the highest financing cost since 2007, while the 30-year auction yield set a new high since 2001.

Market participants have compared this repurchase operation to the Federal Reserve’s "Operation Twist". The Treasury has not yet specified the source of funds for the repurchases, but typically relies on short-term bills to meet liquidity needs. If the authorities essentially swap short-term bills for long-term bonds, the mechanism closely resembles the concept of "Operation Twist".

Jack McIntyre, portfolio manager at Brandywine Global Investment Management, stated: "This administration needs a victory, and maybe it intends to achieve it by artificially suppressing long-term Treasury yields. The pessimism in global long-duration markets is unlike anything I have seen in a long time—they have to do something."

While market sentiment has clearly improved in the short term, many analysts remain cautious about the lasting impact of the repurchase policy.

Gerald Gan, Chief Investment Officer at Reed Capital, said: "The repurchase plan convinces me that the U.S. Treasury is extremely concerned about long-term borrowing costs. But like the intervention in the yen, it is only a temporary effect—repurchases can’t continue for long."

In the forex market, the Bloomberg Dollar Index edged up 0.1% in Asian trading, after falling 0.8% the previous day to its lowest since May. The euro rose 0.1% against the dollar to 1.1687, the highest since May 14.

Lloyd Chan, a forex strategist at MUFG Bank in Singapore, wrote in a research note: "Repurchases alone are unlikely to alter the longer-term fundamentals, but they do send a signal that policymakers want to resist further yield increases. This means the relative rate logic that previously supported the dollar is diminishing."

Bloomberg market strategist Mark Cranfield also pointed out: "For investors weighing Treasury repurchases against the continued expansion of the U.S. fiscal deficit, the dollar is becoming the weakest link, providing more room for Asian currencies to strengthen."

The deep-rooted causes of this bond market turmoil have not been eliminated. The global bond market has been under pressure recently as investors demand higher compensation for inflation risks and rising government debt levels. Geopolitical tensions in the Middle East have further increased price pressures. Meanwhile, corporate issuance to finance the artificial intelligence boom has amplified this round of selling.

In commodities, Brent crude rose 0.4% to around $92 per barrel. Trump previously stated that he would launch an "unprecedented economic war" against Iran and accused Iran of missing an opportunity to reach an agreement, raising geopolitical risk premiums and supporting oil prices.

Gold, after rising to its highest since early June, retreated 0.8% to about $4,480 per ounce. Bitcoin climbed above $69,300 after Trump met with cryptocurrency industry executives at the White House and urged Congress to advance related legislation.